Mergers & Acquisitions

1) What is the free cash flow of the company below:

EBITDA $4,050,000

Depreciation/Amortization: $200,000

Tax Rate: 25%

Capital Expenditure: $157,000

Change in current assets: $300,000

Change in current liabilities: $123,000

Cash flow from operation: $2,910,500

2) A company makes $20 million in revenue with $7 million of COGS. Their operating expense is $4 million which includes $500,000 in depreciation expense. Their projected tax rate is %30. Last year the company spent $2 million on capital expenditures. The level of their current assets has been staying steady for the last 2 years while their current liabilities have increased by $2 million. What is their free cash flow? Please show all calculations.

3) An investor is interested in acquiring an appliance marker with an all equity transaction. The 10 years Treasury Note is at 3.12% The 3 month T-bills is currently at 0.4% THe industry is 150% riskier than the general market while S&P index has been returning 7% annual return for the last 5 years. What is the investor required rate of return according to CAPM? Show work.

4) For a company that has a net income of AUD 17,000,000, stockholder equity of AUD 150,000,000 and 15% dividend payout ratio, what is its growth rate? Show work.

5) If a company borrowed $15,000,000 in long term loan to pay off the older short term loan ($7,000,000) and sold $4,000,000 worth of inventory: what is the change in working capital?

Thank you for the help guys!